Ambassador Michael McFaul
Michael McFaul U.S. Ambassador to the Russian Federation
@McFaul www.facebook.com/amb.mcfaul
The “Reset”: Theory, Results, Future
Ambassador McFaul New Economic School
June 7, 2012
Point of Departure in 2008
• Drift in U.S.-Russia Relations
• Iraq War
• Conflicts Regarding European Security
• Economic Recession
2009: The Obama Administration’s Policy Review on Russia = The “Reset”
Theory of the “Reset”
1. U.S. and Russia Share Common Interests
2. Need to Develop a Multi-Dimensional
Relationship: Security, Economy, Society
3. Increased Engagement Is the Means to Produce
Win-Win Outcomes
Theory of the “Reset” (2)
4. Can practice Dual Track Engagement:
• Engage Russian government
• Engage Russian society
5. Can reset relations with Russia while
maintaining our relations with other countries
6. Can avoid linkage of unrelated issues
Means for Pursuing Reset
• Deepen Interaction between Top
Officials.
• Structure Government-to-Government
Engagement (BPC).
• Create Conditions for Increased Trade
and Investment.
• Facilitate More Society-to-Society
Contact.
Increased Interaction between Top Officials Moscow, July 2009
Moscow, July 2009
Washington, June 2010
Moscow, March 2011
Bilateral Presidential Commission: 20 Working Groups
2012 Joint Report: http://www.state.gov/p/eur/ci/rs/usrussiabilat/186831.htm
• Policy Steering Group
• Agriculture
• Arms Control and International Security
• Business Development and Economic Relations
• Civil Society
• Counternarcotics
• Counterterrorism
• Defense Relations
• Education, Culture, Sports, and Media
• Emergency Situations
• Energy
• Environment
• Health
• Innovation
• Intelligence
• Military Cooperation
• Nuclear Energy and Nuclear Security
• Science and Technology
• Space Cooperation
• Rule of Law
ENGAGING BUSINESS Obama and Medvedev Meeting with Russian
and American CEOs
Putin Meeting Exxon-Mobil CEO Rex Tillerson
Medvedev Meeting with Investors
ENGAGING CIVIL SOCIETY
Washington, July 2011
ENGAGING RELIGIOUS LEADERS
ENGAGING POLITICAL LEADERS
ENGAGING POLITICAL LEADERS
ENGAGING POLITICAL LEADERS AND CIVIL SOCIETY
ENGAGING SOCIETY DIRECTLY (not mediated through media or NGOs)
ENGAGING YOUTH
• Civil Society Summits
• Civil Society Participation in BPC
working groups
• Exchange Programs for environmental
experts, health specialists, human rights
advocates, business leaders, etc.
Fostering Peer-to-Peer Dialogue Between Americans and Russians
PEER-TO-PEER DIALOGUE
RESET RESULTS
Security
New START Treaty
• Entered into force in February 2011
• Limits each side to: – 1550 deployed warheads
– 700 deployed delivery vehicles
– 800 deployed and non-deployed ICBM launchers,
SLBM launchers, and heavy nuclear bombers
• Strong verification including: – On-site inspections (18 per year)
– Data exchanges and exhibitions
Afghan Transit and
Northern Distribution Network Contributing to Stability in Afghanistan
Afghan Transit and
Northern Distribution Network (NDN)
– Afghan Transit • Up to 4,500 U.S. flights annually
– 2,180 U.S. flights as of May 8, 2012
– 369,104 U.S. personnel and troops transited Russia
• Russia considers offering use of air facility to U.S. to
aid in combating terrorism
– NDN • Expanded ground and rail transit through Russia,
including reverse transit • 47,711 containers delivered of lethal and non-lethal equipment
– 53% of sustainment cargo goes through the NDN
– 75% of supplies transiting NDN go through Russia
– Over 50,000 containers shipped across Russia
Cooperation on Afghan Security
• Supplies
– Fuel
– 21 Mi-17 helicopters, option to purchase additional units
– Small arms
• Counter-Narcotics Cooperation
• Intelligence Information Exchange
Other Military Cooperation
• Russian Black Sea task force takes part in
NATO drills off Spanish coasts – first
time Russian sub has participated in any
NATO exercise
• Russian Air Force pilots will take part in
a joint U.S.-Russian military exercise for
the first time
• Improved information exchange on
military exercises
Iran
• 2009: Jointly Developed IAEA Tehran
Research Reactor (TRR) Proposal
• 2010: UNSC Resolution 1929 –Restricts Iran’s nuclear activities
–Restricts ballistic missile and conventional
military activities
–Restricts military sales to Iran
• 2012: Close Cooperation in the P5+1
North Korea (DPRK) • UNSC Resolution 1874 (June 12, 2009)
• Russia and U.S. supported in response to a May 25,
2009 DPRK underground nuclear test
• Tightened inspection regime against North
Korea (high seas, sea ports, airports)
• Blocked funding for nuclear and missile
proliferation activities
• UNSC Presidential Statement (April 16, 2012)
• U.S. and Russia condemned the DPRK’s rocket
launch on April 13, 2012.
Counterterrorism Cooperation
• Presidents issue Joint Statement on Counterterrorism
Cooperation at Deauville Summit (May 2011)
• Vigilant Eagle Exercises (2010 and 2011)
– NORAD and Russia enhance coordination and
partnerships to ID, intercept, and follow a
suspected hijacked aircraft
• In May 2012, for first time ever, Russian Paratroopers
take part in a counterterrorism exercise at Ft Carson
Russian and American Troops Training Together
Cybersecurity
• Exchange information on technical
threats from botnets
• Exchange views on each other’s
military’s views of operating in
cyberspace
• Establish 24/7 systems allowing U.S.
and Russia to communicate about
cybersecurity issues via existing crisis
prevention communication links
Lock Down of Nuclear Materials
• HEU Removal – Cooperating to remove Russian-origin HEU from third countries and return to
Russia, including all HEU from Ukraine in March 2012.
• HEU Downblending – As of December 2011, verifiably downblended 442 MT of former Soviet
weapons-origin HEU (enough for approximately 17,698 nuclear weapons) for
peaceful use in U.S. power plants, providing 10% of U.S. electricity. A total of
500 MT is to be eliminated by 2013.
• Plutonium Disposition – Signed amendment to agreement to dispose of enough US and Russian surplus
weapons plutonium for approximately 17,000 nuclear weapons.
NATO-Russia
• Afghanistan – Two-way transit arrangement – Ulyanovsk Transit Center - will provide air/rail option for
moving non-lethal supplies out of Afghanistan – Expanded counternarcotics training to include Pakistan and
broaden scope of cooperation with Central Asian countries – Development of an NRC Helicopter Maintenance Trust Fund
• Expand Counterterrorism Cooperation – Joint technology development to detect explosives – Countering threats to civil aviation – Enhanced information exchange
• Expand Counter-Piracy Cooperation • Talks on Missile Defense Cooperation
ECONOMY
WTO
• Represents completion of longest (18 year)
accession process in WTO history • Unprecedented U.S. support for Russia’s bid
• Russian accession agreement includes steps to
liberalize both goods and services sectors • Creates a more competitive, transparent Russian economy
• Accession creates the conditions to expand trade
and investment between Russia and U.S. • Some studies estimate doubling of trade in the medium term.
123 Agreement
• Permits export of nuclear materials and equipment by
U.S. firms to Russia, subject to robust technology
transfer reviews
• Enables both countries to jointly develop
proliferation-resistant technology
• Facilitates export of Russian-origin enriched uranium
or fuel assembles by U.S. firms (USEC,
Westinghouse) to third countries
• Facilitates direct contracts between U.S. and Russian
nuclear firms
• Allows joint bids on civil nuclear projects
U.S.-Russia Trade
$42.9 billion in 2011, Highest Ever
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
2006 2007 2008 2009 2010 2011
U.S. trade in goods with Russia
Bilateral trade, $Billion USD
U.S. Investment in Russian Economy (1)
• John Deere: Opened new $125 million assembly and parts distribution
facility in April 2010
• Coca-Cola: Invested over $80 million to develop Russia business in
June 2010; company has 14 plants and over 60 distribution centers in
Russia
• Burger King: Opened first restaurant in Moscow in January 2010
• Subway: Entered market in December 2009. Plans to expand shops from
78 to 1000 by 2015
• Kimberly-Clark: Opened $170 million plant in June 2010 to produce
diapers
• Ford: Formed a joint venture in June 2011 with Russia’s Sollers, planning
to invest $1.2 billion
U.S. Investment in Russian Economy (2) Boeing:
• 50 737s to Russian Technologies:
• 16 777s to Aeroflot
• 4 787s to Transaero
• $9.7 billion in firm orders since 2010
Cisco: $1 billion investment in high-tech sector
PepsiCo: $3.8 billion investment in Wimm-Bill-Dann
Exxon-Mobil/Rosneft: Investments potentially up to $500
billion; Strategic agreement gives Exxon access to oil deposits
in Arctic and Black Sea. Initial investment will be $3 billion
for first-phase exploration.
GE: New Joint Ventures in Energy and Health Care
• Could drive $10-15 billion in new sales for GE
Russian Investment in the U.S. Economy
• From 2004 to 2009, Russian FDI in the U.S. increased from
$420 million to $7.7 billion
• Russia’s FDI stock dropped to $4.4 billion through 2010, due
primarily to major divestitures of Russian steel companies
0.00
2.00
4.00
6.00
8.00
10.00
2004 2005 2006 2007 2008 2009 2010
Russian FDI in the US (USD bn)
Russian FDI in the US (USD bn)
Cooperation on Innovation
• Parallel Business Summits (July 2009, June 2010)
• President Medvedev Visit to Silicon Valley (June
2010)
• Governor Schwarzenegger Leads Technology
Delegation (October 2010)
• Innovation Working Group
• Rule of Law Working Group
• MIT-Skolkovo Partnership
SOCIETY
Growing People-to-People
Connections • New Agreement on Visas (July 2011)
– Tourists and businesspeople will receive three-year,
multiple-entry visas to visit the other country
• Adoption Agreement (July 2011)
– Enhanced provisions for protection of adoptees
• “American Seasons” (2011-2012) – Chicago Symphony Orchestra
– Herbie Hancock
– Wylie and the Wild West
– John Forte
– Annie Leibovitz
– Bill T. Jones
Increased Travel to the U.S.
2009 2010 2011
Arrivals to the U.S. 143,000 175,000 232,000
Visas Approved 154,000 186,000 199,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
Recent Russian Travel to the United States
Fields of Unnoticed Cooperation
• Space
• Health and Science
• Environment and
Energy
– Smart Grid Partnership
Program
• Text4Baby Russia
– Delivers free mobile text
messages to Russian
mothers
Societal Attitudes Improving
• Russian favorable attitudes
toward the U.S. increasing.
• American favorable attitudes
toward Russia increasing.
Add HERE slide on us attitudes???
Agenda for the Near Future: Issues
• Increasing Trade and Investment
• Syria
• Nonproliferation (Iran and
DPRK)
• Missile Defense
Agenda for the Near Future: Approaches
• Avoiding Zero-Sum Competition
• Managing Differences in Discussions
over Common Values:
– Sovereignty and Universal Values
• Getting Beyond Cold War Stereotypes
Reset Continuity
• In last three years, over two dozen major
accomplishments
– Compared to previous historical periods, the most
active period of cooperative outcomes in U.S.-
Russian relations
• For the Obama administration, this record of
achievement demonstrates the benefits of
continuing with the “reset”
Let’s keep talking
@McFaul
www.facebook.com/amb.mcfaul
http://m-mcfaul.livejournal.com/